EU-Aust on the cusp of trade negotiations

Australia and the European Union have agreed on the scope of a future free trade deal.

EU Trade Commissioner Cecilia Malmstrom and Australian Trade Minister Steve Ciobo spoke on the phone on Thursday.

Ms Malmstrom says she will seek a mandate from EU member states to launch formal negotiations.

"This is a key step toward the launch of negotiations," Mr Ciobo said.

"We're creating new export opportunities for Australian businesses because more exports means more jobs."

The EU is Australia's second largest trading partner and largest source of foreign investment.

In 2015-16, two-way trade was worth $95.6 billion and total investment stock from the EU was almost $1 trillion.